The Right Way to Dissolve your Corporation
Original post date: Feb 23, 2016
There are many reasons why you may choose to voluntarily dissolve your incorporated business. It may be that you’re closing up shop due to unfortunate circumstances, or you’ve been offered a great job somewhere or have a new business opportunity where you want to put all of your focus. In any event, there are things you must consider and steps you must take to properly dissolve your business.
In the decision to close the business, there are a number of pieces required to complete the wind down of your business. One of the items is to begin the process of the corporations dissolution within the jurisdiction of incorporation. Just as when you originally started the corporation and completed the Articles of Incorporation to begin the operation of your business, with the closure of your business, you must now file Articles of Dissolution as one of the vital steps to winding down the corporation. In completing the Articles of Dissolution, you are legally putting an end date to the carrying on of the corporate operations and responsibilities of that corporation.
Company Key Not Required
The Province of Ontario unveiled a new system providing a company key to any new registering or incorporating business in Ontario with the addition of any existing business to apply and obtain a company key prior to completing any subsequent filing including Articles of Dissolution. As an intermediary with the Province, we are able to complete the Articles of Dissolution without the requirement of the Company Key. You can complete the Articles of Dissolution online submission with us and avoid the effort and hassle of obtaining the company key prior to completion.
Agreement with Shareholders
Depending on the size of your corporation, there may be other stakeholders or shareholders who need to be consulted throughout the process of terminating your company. You may have to reach a consensus with your co-founders or get a majority vote from shareholders. Whether it’s a straightforward corporate structure, or an LLP, you will need to have consensus and approval from your business associates, as per the conditions of your initial agreement with those associates. You may need to have a vote to dissolve with other shareholders of the corporation and a majority agreement to do so. A Special Resolution is needed to state that the agreement is to dissolve the corporation and the date of the meeting held in determining this decision.
Notify Your Employees
If your business has any employees, you must inform them of the decision to dissolve. It is important to understand the rules of employment termination and to follow the Employment Standard Act.2000. In accordance with the act, severance pay to an employee is required to be paid to an employee who has been employed for 5 or more years by the dissolving corporation. It is recommended that you discuss the departure of the employees with an accounting professional to adhere to your obligations to the employees for the business closing.
Distribute Assets to Relevant Parties
Once you have filed for dissolution and paid any debts the corporation had at the time of dissolution, you must distribute any remaining assets in the company’s name. These should be distributed to shareholders, investors, and co-founders at the percentage rate at which they own the business.
It may sound like a big endeavour to dissolve your corporation, but there are resources to simplify the process. Follow the steps above and contact our team of experts for further guidance.
Closing Bank Accounts, Tax Accounts and notifying suppliers
Just as when you originally started your business, there are many items to consider with closing your business including the disbursement of any assets or equipment, property or liabilities that are attached to the corporate identity. The businesses that support your business such as suppliers should be notified and any remaining accounts be determined and finalized. There are final taxes to be determined and paid along with closing related tax accounts such as payroll, hst, pst and or qst depending on your specific circumstance and jurisdiction. Revenue Canada should be able to help provide any clarification on these steps.
Filing Articles of Dissolution
Filing Articles of Dissolution within the jurisdiction you incorporated your business puts an end to your business operation along with any debts, obligations and liabilities attached to the operation of the business.
If you would like some assistance with the winding down of your business, we offer assistance in completing Articles of Dissolution for both Ontario and Federal Corporations within Canada. If you are looking at dissolving in another jurisdiction, call our office directly at 1-800-280-1913 or 1-416-599-9009 and speak with one of our helpful agents to obtain a quote. Let us get you through the steps to dissolve your business corporation easily and quickly.
Filing Articles of Dissolution in Ontario
In Ontario, the Articles of Dissolution require an email filing with the Province of Ontario. The availability to dissolve your corporation electronically does not yet exist; however, we have established an easy online portal for you to provide the information for your dissolution and we will prepare the manual documentation to make the process as simple as possible so you can get on to other things in your life that matter.
File your Ontario Articles of Dissolution
If you want step by step instruction on the process, please review:
The Ontario government has made it easier to complete the Articles of Dissolution since changes to the act came into place in October of 2021.
You no longer are required to obtain a separate consent letter from the Ministry of Finance prior to submitting the Articles of Dissolution. This item has now been integrated between government bodies. The consent is intergovernmental and you no longer require any action or involvement outside of completing the Articles of Dissolution.
How long does it take to dissolve?
The process once we have filed the Articles of Dissolution takes 3 to 7 days. As an intermediary with the Province, we have exclusive, direct access to the Province and therefore the filings are seamless.
We can begin preparing the manual Articles of Dissolution once you have provided the details for your dissolution. The Province of Ontario splits the filing of the Articles of Dissolution into 2 separate filings one for the businesses who did not commence business activity and one for those corporations that have commenced business.
When filling in the submission to our office, your first selection is to choose between these two options as the filing requirements are different in each circumstance. Once you have made the selection between whether the business has commenced or not, you will provide details specific to your corporation
Where the corporation has commenced business, we will ask for the following details for the filing:
- Name of the corporation
- Date of Incorporation (we can look up if you are not sure)
- Corporate number (we can also provide this detail to you)
- The corporation by checking a box has
(A) no debts or obligations or
(B) has duly provided for its debts and obligations or
(C) has obtained consent from creditors its dissolution
- In the next section you will provide whether the corporation has
(A) no property to distribute,
(B) Distributed its remaining property
- Ensure there are no pending proceedings in any court against the corporation
- The corporation has obtained obtained the consent to dissolve (as provided above)
Where the corporation has not commenced business, we will ask for the following details for filing
- Name of the corporation
- Date of incorporation (we can look up if you are not sure)
- Corporate number (we can also provide this detail to you)
- Confirm that corporation has not commenced business, none of the shares of the corporation have been issued, and the corporation has no debts or obligations
- The corporation either has
(a) no property to distribute or
(b) has distributed any remaining property
- There are no court proceeding against the corporation
- The corporation has obtained the consent letter from the Ministry of Finance (as provided above)
A current director is required to provide details of his or her name, address and position within the corporation to complete the Articles of Dissolution. You or whoever may be a current director can provide details of the Dissolution.
When you have completed our easy online submission, we will begin preparing the documentation towards the dissolution of your corporation. Once we have prepared the articles, we will email you the documentation for your review and approval.
Our office as an intermediary with the Province of Ontario will provide the documentation for the Articles of Dissolution on the same day we receive the online application from you. The documentation will be filed and the completed documents will be finalized on a same day basis. We will then email you a copy of the completed dissolution document for your records. Once the documents have been completed, you can contact Revenue Canada to notify them that you wish to close the tax account for the corporation.
What are the costs to dissolve the corporation Ontario?
|Our fee||$149.00 + HST to prepare the Articles of Dissolution|
|Our fee is||$39.00 +HST to file the documents with the Province|
To begin the process click here now.
Filing Articles of Dissolution in Canada
In Canada, the Articles of Dissolution are available electronically with Industry Canada. The process with our office is easy and provides a step by step guide to get you through the dissolution process simply.
If you are ready to proceed now, please click here.
If you would like a step by step instruction on the process, please review the step by step guideline as to what is required
Details of your corporation:
- Name of Corporation
- Date of Incorporation or Amalgamation (we can look up for you if uncertain)
Choose one of the following statements:
(A) the corporation has not issued shares,
(B) the corporation has no property and no liabilities,
(C) the corporation has distributed all of its property and discharged all of its liability
- Name of person who will hold the corporate records for 6 years after dissolution
- Details of accounting or law firm if working on behalf of the corporation
- When the date of dissolution is to occur
(A) as soon as possible or
(B) future date
- Name, phone number and email address of individual filing the Articles of Dissolution
- Download or email a copy of your Articles of Incorporation to our office (we can obtain a copy if you don’t have with additional fees)
If your Federal corporation was registered in Ontario, we can cease the corporation in Ontario as part of the dissolution process. The additional information requirement are as follows:
- Registered and principal office addresses in Ontario
- Name and address of the Chief Officer/Manager in Ontario if applicable
- Billing and shipping information
We will prepare the Federal Articles of Dissolution according to your instructions and email you the documents for review.
Once you provide approval, we will ask you to sign the documents and simply confirm to us this has been done. We don’t require a copy of signatures.
We will submit your Articles of Dissolution to the Federal government for review and acceptance. This process typically takes 1 business day.
When we receive the certificate back that the articles have been accepted, we will provide you by email the finalized documentation.
What are the costs to dissolve a Federal corporation?
|Our fee||$149.00 + HST|
|Ceasing in Ontario||$39.99 + HST (if applicable)|
|If ceasing from Ontario||$230.51|
Ontario Business Central assists thousands of clients each month to complete their business requirements whether starting, changing, cancelling or dissolving their businesses. We would be honoured to assist you in dissolving your corporation.
Ontario Articles of Dissolution
Federal Articles of Dissolution
As a business owner, it’s important to take the right steps when dissolving your corporation. If you have any questions about how you can file a cancellation or dissolution, you can contact the Ontario Business Central team. We offer 24-hour preparation for Articles of Dissolution.
Office Hours: 9:00am – 5:00pm
Monday – Friday E.S.T.
Ontario Business Central Inc. is not a law firm and cannot provide a legal opinion or advice. This information is to assist you in understanding the requirements of registration within the chosen jurisdiction. It is always recommended, when you have legal or accounting questions that you speak to a qualified professional.